Selling on Ebay is an ever more popular, and easier online money making method.
First, you will need to setup a business Ebay account if you plan to buy and re-sell for a profit. You will also need a business paypal account. It is not required to have a business bank account to link to your paypal account, but it can make things a lot easier for accounting.
Once you have these setup, you will be required to register for Self Assessment with the HMRC. This is also where you will create your company name. Exciting times!
Once you have these foundations, you can start to work on what you will be selling, and at what price.
Choosing your strategy
To sell on Ebay, you generally need a product (unless you will be selling a service). You could choose a product that you personally have benefited from, this way you know the product, you can be passionate about it. This is helpful, as your buyers are not just purchasing a product, they are purchasing your trust in that product. Price is not always what you can use to leverage buyers, a lot of the time a good knowledge of what you are selling is worth more to the buyer.
Using suppliers from China (or elsewhere) and drop shipping the orders is a common practice, one which I adopted myself (after ending up with unsold stock!). If you are unfamiliar with drop shipping – it is a method of fulfilling orders retroactively. You list an item for sale on Ebay, the buyer pays you for the item, you then order the item from a supplier and instruct the supplier to send the item to your customer. This is valuable because it means you do not use your own money to make the purchase, as you have already been paid. Also, you do not need to carry inventory, which you may never sell. This is a quicker, easier and less risky way to sell online.
Some suppliers I have used in China which offer drop shipping services:-
Bang Good – My personal favorite – great service and easy to use. They also have warehouses in the UK and USA.
Tiny Deal – Good, reliable but shipping can sometimes be slow.
Chinavasion – Be careful with shipping costs, bit steep, but not bad.
Amazon – You could even buy on Amazon and re-sell on Ebay.
Aliexpress – Good for grabbing bargains when you exhaust other suppliers
Choosing your product
Whether you pick a niche, or if you follow sales trends, your product will sell better if there is of course a demand for it. One way of determining this is to simply perform ebay searches for your product, take note of the number of watchers, and number of sales.
Another way is to use a powerful market analysis tool, such as Terapeak.
Terapeak will tell you if the market for your product is worthwhile. You can try it free for one month, but it is such a useful tool, it is well worth its subscription price.
Whatever product you choose, try to find one with small shipping weights. Small electronics, accessories, toys etc. If you are drop shipping, I advise putting a disclaimer in your listing advising of the potential for customs charges. It is rare, but it can happen, make sure the buyer knows it is their responsibility if it does.
Once you are confident you have a product you can sell, and get behind, you can focus on listing creation. There are many tools out there to help with this, but I highly recommend Ink Frog. Extremely useful for listing with nice looking templates, as well as bulk listing and editing. You can do so much with this tool, and it is totally free!
To keep track of everything, create a spreadsheet, detailing all listings with dates, quantities, cost price to you and sale price. You will need to also account for the Ebay selling fees and Paypal Fees, as well as shipping costs if you are posting the item to your buyer. Easiest way is to find out Ebays percentage for the category you are selling in and use a formula to deduct this from the sale price in the spreadsheet. Ebay fees vary, you can find their current final value fees here. They also charge a listing fee which is generally 26p (or 200 free per month if you are an Ebay store). You can do the same for Paypal, they take a flat 3.4% fee along with 20p per transaction. Once you can easily see your net profits on a spreadsheet, you simply add a new line each time you list another item. You will start to memorize the fees as you go!
Try to be fair with your pricing, do some Ebay searches and note the prices, see if they sell at those prices, and choose your asking price. Try to aim for 10-20% net profit per sale. Some larger priced items may fetch you more, but they don’t sell as quick as lower cost items.
The Customer is always right.
Be courteous and respond in a timely manner to any queries from buyers. Offer 14 day refunds, it is a requirement for business sellers to do this. If you are drop shipping, ask the buyer to send the item back to yourself and you can either re-sell the product or return to your supplier.
Great customer service is what will set you aside from the majority of casual Ebay sellers, and will improve buyer loyalty. Keeping a loyal customer is more valuable than gaining a new one, this works best of course if your item is a consumable, like a skin moisturizer. I once had a sale where the buyer messaged me asking I refund as he was not not ready to buy the item at that time after all. I refunded immediately and Ebay credited my final value fee to me. A few weeks later I sold the same item and recognized the user id, it was the same buyer, clearly this time he was ready to buy 🙂
Take your time, and pick suppliers that have lots of stock of your item, Bang Good have a tool which emails you a warning when an item falls below a user defined level of stock, this is useful, so you can adjust your listings accordingly.
Once you have one product live, find another! Keep going until you have multiple listings – and then go more – you will not be far from making huge sales!
Stay focused on your goals, keep at it, and once you get into the swing of it, you will be selling in no time, and enjoying it too!
As always, if you need a hand, drop me a comment below 🙂